Glossary | Bankless Academy

An extra layer of security used to make sure that people trying to gain access to an online account are who they say they are.

An attack on blockchain consensus by controlling more than half of the block-producing power on the network.

Unique public identifier for an entity on a blockchain.

A tool that combines multiple sources to offer the most competitive options.

A free distribution of crypto assets to users.

Short for Capital Allocation Protocol. An open-source protocol that enables groups to efficiently and transparently allocate pooled capital.

Allows an entity, usually a smart contract, the right to use a specified amount of your tokens in a transaction.

Layer 1 blockchains other than Ethereum and Bitcoin.

(Automated Market Maker) A trade matchmaking system, based on a public algorithm.

Communication between multiple collaborators, where participants don’t have to be present at time of messaging.

A signed confirmation that something is true. On Ethereum, validators publish attestations voting that a block is valid.

The quality of governing your own actions, rather than adhering to frameworks of others.

A naming service on the Base network, giving wallets human-readable names ending in .base.eth.

A trading method that collects many orders over a short period and settles them together at one fair price.

Risking money in exchange for greater rewards.

A cheap, temporary data space in Ethereum blocks, used by Layer 2s to post their transaction batches.

A group of transactions on the blockchain.

A specialized operator that assembles transactions into new blocks, which block proposers then publish to the network.

Search and exploration tool for blockchain data.

The unique identifier for each block file. Each new block refers to the block hash of the previous block to form the single-file connected blockchain.

A network participant chosen to create new blocks of transactions, such as a miner or validator.

The validator node chosen by the network algorithm to select the next block to be added to the blockchain.

An amount of native coin given to the proposer of a new valid block.

A system in which a record of cryptocurrency transactions is maintained across many computers around the world.

Blockchain applications that allow you to swap cryptocurrency, use web3 social media, make charitable donations, or even learn onchain, like at Bankless Academy.

The structures for how data is stored in blockchain technology.

A new type of network, hosted across many computers. It's adding a new layer of digital ownership to the internet.

The problem describing the need for all 3 blockchain qualities: Security, Scalability, and Decentralization.

The amount of space in each block for storing transactions and data.

Willing to pay interest to lenders in order to borrow assets.

Connection that allows two different blockchain networks to communicate with each other and exchange assets.

The market symbol for bitcoin.

No government or company has control to determine what is or is not allowed.

An institution regulating money, banks, and currency in a country.

The concentration of power over an entire system under a single authority/entity.

Where a single authority/entity controls the entire system.

(CEX) A centralized platform that coordinates cryptocurrency trading for a fee, similar to a stock exchange.

Locking tokens through a Centralized Exchange to generate rewards.

Corporations or entities that control online activities, setting rules and fees, and managing data and content in ways that often prioritize their own interests over user needs.

(Centralized Exchange) A platform that coordinates cryptocurrency trading for a fee, similar to a stock exchange.

Binds blocks of data together to form a database which cannot be altered or changed.

The number of a specific cryptocurrency's coins or tokens publicly available for the market to trade.

The native asset of a blockchain mostly used as a form of currency to facilitate transactions on the network.

A type of self-custody wallet that is stored on offline hardware.

A borrower's pledge of specific asset(s) to a lender, to secure repayment of a loan.

A bank managing money for people and businesses.

The ability to combine existing smart contracts and apps like building blocks to create new products.

Agreement, trust, and security across a decentralized computer network like blockchains.

The method by which a blockchain network judges which transactions are legitimate, and which are fraudulent.

The risk that another party may not fulfill its part in an agreement.

A mechanism that does not discriminate for or against any specific people.

(Cryptocurrency) Currencies native to the internet, not an individual country. Rather than being managed by a central bank, they’re often governed by their users.

An app that allows you to store your cryptocurrency, and send/receive or spend it.

A currency native to the internet, not an individual country. Rather than being managed by a central bank, it’s often governed by its users.

Verifying blockchain transactions in exchange for cryptocurrency rewards, used on Proof-of-Work networks like Bitcoin.

An app that allows you to store your cryptocurrency, and send/receive or spend it.

Techniques for secure communication or transaction, preventing external interference.

With a custodial wallet, another party controls the private keys, thus controlling access to your crypto assets.

A financial institution given responsibility to secure your assets.

A user-defined data entry linked to an ENS domain, letting you attach extra information, like a website or social links, beyond standard addresses.

(Decentralized Autonomous Organization) An organizational structure that uses blockchain technology to automate voting and management.

A “decentralized application” that connects to blockchains and decentralized networks.

A self-reinforcing collapse where a falling price forces actions that push the price down further, as with some algorithmic stablecoins.

The transfer of control to many individuals rather than one single authority.

No single authority or entity controls the system.

(DEX) A protocol that facilitates exchange without requiring trusted intermediaries.

Money with properties agreed on by the community, rather than set by an institution.

(dApps) Online services that use automation to reduce fees and improve user experience.

(Decentralized Finance) A set of self-custody finance tools, hosted on a blockchain.

Giving a specific responsibility to another person, i.e. delegation of token voting power.

A system of government where citizens exercise power by playing a key role in decision-making.

(Decentralized Exchange) A protocol that facilitates exchange without requiring trusted intermediaries.

Protocol that combines DEX liquidity from multiple sources in one interface.

Anything of value stored digitally.

Proof, created with your private key, that you approved a message or transaction. It works like a handwritten signature, but cannot be forged.

Spending the same digital money twice. Blockchain consensus exists to prevent this without a central authority.

Contributing value in exchange for rewards; money verb on the skill cube.

The process of converting information into private and secure code, used to prevent unauthorized access.

The time taken for a specific number of blocks to be included on any particular blockchain.

A fairness principle, where everyone has the same chances to succeed regardless of their background or circumstances.

A standard for deploying both fungible and non-fungible tokens on Ethereum, under one optimized contract.

A standard for fungible tokens on Ethereum. These tokens are divisible and non-unique.

A standard for non-fungible tokens on Ethereum. These tokens have a unique digital identifier, cannot be copied, or subdivided.

(Exchange-Traded Fund) An investment fund traded on the stock market, holding assets like stocks, gold, or bitcoin.

(Ether) Ethereum’s native cryptocurrency. Used to perform transactions on the network, run a validator node, and more.

(ETH) Ethereum’s native cryptocurrency. Used to perform transactions on the network, run a validator node, and more.

A public ledger documenting transactions and ownership on the Ethereum network.

The Ethereum Virtual Machine or EVM is a piece of software that executes smart contracts and computes the state of the Ethereum network.

A national currency that, rather than being backed by a commodity like gold, derives value from the public's trust in the issuer.

The guarantee that a confirmed blockchain transaction is permanent and cannot be reversed or changed.

(Fear Of Missing Out) Anxiety or apprehension about not being included in something.

A radical change in a blockchain network that results in two branches: one following the previous protocol, and one following a new one.

In blockchain economies: Unfair or fake transactions, used to change amounts of cryptocurrency held.

Evidence that a transaction is invalid and that fraud has occurred.

Seeing someone's pending transaction and paying to get your own processed first, profiting at their expense.

The property of being interchangeable: each unit has the same value and can replace any other, like one dollar bill for another.

Transaction fees for blockchain networks.

Transactions where the gas fee is paid in the token being traded, or covered by a sponsor, instead of the network’s native coin.

A monetary system where a country's currency has a value directly linked to gold.

A unit used on the Ethereum blockchain, equal to 0.000000001 ETH (one billionth), commonly used to describe gas prices.

A scheduled event, roughly every four years, that cuts the reward for mining new Bitcoin in half.

A type of self-custody wallet that stores private keys offline in a physical hardware device.

A digital fingerprint for information.

A function that turns any input into a unique fixed-size fingerprint (hash). It is easy to compute one way, but practically impossible to reverse.

(Hold On for Dear Life) Crypto slang for not selling crypto no matter what the market conditions are.

A type of self-custody wallet that is perpetually connected to the internet.

A general increase in prices and fall in the purchasing power of money.

A signed trade request describing the outcome you want, like “swap X for at least Y”, leaving the best route to specialists.

An entity or service connecting people, in order to facilitate an exchange of value or information.

A token that is part of the middle of a trade route, not the starting or ending token.

The ability of different apps, tokens, and blockchains to work together and share information.

Putting money into an asset, like a coin or token, expecting its value to grow.

(Know-Your-Customer) A government-sanctioned user identification process.

Layer 1 refers to a base network such as Bitcoin or Ethereum.

A blockchain that extends Ethereum scalability while inheriting Ethereum security.

Layer 1 refers to a base network such as Bitcoin or Ethereum.

A blockchain that extends Ethereum scalability while inheriting Ethereum security.

The record of all transactions that have ever occurred.

Deposits assets to earn interest.

A payment network built on top of Bitcoin, using payment channels to make everyday payments instant and cheap.

In blockchain economies: The ability to easily use a digital asset in trading, or use in smart contracts.

Tokens representing staked Ether. Holders earn a portion of staking rewards proportional to the amounts staked.

The automatic sale of a borrower’s collateral when its value falls too low to safely cover the loan.

The quantity of a token available for trading.

A communal vault of tokens that facilitates permissionless token swaps.

(Liquidity Provider) Blockchain users who loan their tokens to protocols in exchange for a share in fees.

Tokens representing staked Ether. Holders earn a portion of staking rewards proportional to the amounts staked.

The main, live blockchain network where transactions carry real value, as opposed to test networks. Often refers to Ethereum’s Layer 1.

The total value of a given token, or market sector.

The maximum number of coins or tokens that will ever exist for a particular cryptocurrency.

A cryptocurrency token themed on an internet meme, often with no purpose or utility.

A tool that brings together other aggregators into an extra overview layer.

(Maximal Extractable Value) Profit block producers can make by reordering, inserting, or censoring transactions within blocks.

A participant in a Proof-of-Work network, like Bitcoin, who competes to propose new blocks in exchange for rewards.

The Proof-of-Work process of verifying transactions and adding new blocks to the blockchain, in exchange for rewards.

Issuing new fungible or non-fungible cryptocurrency tokens on a given blockchain.

How a central bank manages the amount of money circulating in an economy.

A medium of exchange, a unit of account, and a store of value, used to facilitate transactions for goods and services.

The process by which a decentralized community reaches agreement on network features/upgrades.

The principle of treating all participants equally, without bias towards any user or group.

(Non-fungible Token) A token with a unique ID that cannot be replicated, as compared to a fungible token like Ether that has no unique identifier.

A computer running blockchain software that stores a copy of the ledger and helps verify the network.

A member of the Ethereum community, running a validator node to process transactions on the network.

Any action or data that happens outside the blockchain, like on regular servers or in signed messages.

Recorded on a blockchain network. Refers to actions performed on cryptocurrency networks like Ethereum.

The automated system that mediates changes to a blockchain’s structure.

A public identity built from your blockchain activity and records, such as an ENS name linked to your wallet address.

A service that converts regular money, like dollars, into cryptocurrency. Offramps do the reverse.

An accessible digital space where information, services, and communication are available to all users without control by centralized entities.

Software with source code that anyone can inspect, modify, and enhance.

A Layer 2 rollup that assumes all transactions in its batch are valid, unless proven false by a fraud proof during a challenge period.

A service that brings outside information, like market prices, onto the blockchain for smart contracts to use.

A list of buy and sell offers at different prices. Traditional exchanges match trades from this list.

(Over the Counter) Trades made directly with private entities.

(OTC) Trades made directly with private entities.

An app that securely stores your passwords and can generate strong, unique ones for each account.

Allows two parties to transact multiple times without the need for each transaction to be recorded on the blockchain.

A person or entity treated as an equal.

Connections between multiple parties that don’t require an intermediary.

Method of maintaining value equivalence between two or more assets.

Not requiring the permission of any entity.

A type of social engineering attack where the attacker poses as a trusted person or organization to trick victims into sharing sensitive information or sending them money.

A POAP (Proof of Attendance Protocol) is a badge that keeps a reliable record of life experiences in your wallet, like for example successfully completing a lesson.

(Proof of Stake) Consensus where validators lock up stake to secure the network.

How much your own trade moves the price on a DEX, based on the trade’s size.

The ENS name linked to your wallet address, letting apps display your name instead of a long address.

A private key grants access to your wallet, allowing you to send crypto assets to other wallets.

Sending transactions directly to block builders instead of the public queue, hiding them from front-running bots.

A consensus method that randomly chooses block producers based on the stake each participant has locked into the protocol.

A consensus method where miners spend computing power (the “work”) competing to propose valid blocks.

Acting under a chosen name that hides your real identity.

Public blockchains allow anyone to view the blockchain ledger.

A public good is a commodity or service that is available to all members of society.

A code created from your private key that is safe to share. Your wallet address is derived from your public key.

A crowd-funding mechanism that amplifies available resources with individual donations of any size acting as votes. The broader the support, the bigger the impact!

A recovery phrase is a list of 12 to 24 words, used to generate your wallet's public key and private key.

A warning sign of danger.

Reusing staked Ether tokens to help secure and validate other protocols, in exchange for rewards.

(Retroactive Public Goods Funding) A mechanism for funding projects, based on their historical impact.

A Layer 2 scaling solution that processes many transactions away from the main chain, then posts them in one batch, increasing throughput and lowering costs.

An attack where bots place trades right before and after yours to move the price, profiting at your expense.

The pseudonymous creator of Bitcoin. To this day, nobody knows their real identity.

A blockchain’s capability to handle a growing amount of work, transactions, and usage with minimal disruption for users.

A cryptocurrency token that is launched for the sole purpose of stealing investor funds.

The state of being in short supply.

Being in short supply.

Ability of a blockchain to withstand hacking attempts, code exploits, and economic exploits among other attacks, and continue to function as normal.

Group of random words generated by a wallet on setup, they act as the master key to ALL accounts controlled by that wallet. NEVER SHARE YOUR SEED PHRASE WITH ANYONE FOR ANY REASON.

A means of holding your assets where only you have access to them.

(AKA: Non-custodial wallet) With a self-custody wallet, you have sole control of your private keys, which in turn control your crypto assets.

The “lowest” level of a blockchain that records the details of asset exchange from finalized transactions. Mainnet Ethereum is the settlement layer for Ethereum layer 2 scaling solutions.

The time needed for a transaction to be confirmed.

The process of splitting a single blockchain into multiple chains that all run together in parallel to increase scalability.

A separate blockchain that runs in parallel to a main blockchain, connected by a bridge, with its own validators and security.

A penalty on Proof-of-Stake networks that destroys part of a validator’s stake for provable cheating, like signing two conflicting blocks.

The difference between the price you expect and the price you get when your trade executes.

The maximum price change you accept for a trade. If the price moves more than this, the trade is cancelled.

Computerized code that executes terms of a contract automatically.

A wallet powered by a smart contract instead of a single private key, enabling features like account recovery and passkey logins.

Manipulating someone into sharing sensitive or confidential information such as passwords or seed phrases.

A node operator running an independent validator node.

Running your own validator node to process transactions in Proof-of-Stake systems.

A specialist that competes with others to execute a user’s intent at the best possible price.

Using your crypto assets to pay for goods or services.

An ETF that holds the actual asset, like bitcoin, letting people invest in it through the traditional stock market.

A token designed to hold a steady value, usually pegged 1:1 to a currency like the US dollar.

The company or organization that creates a stablecoin and manages the reserves backing its value.

The amount of a financial asset locked into a cryptocurrency protocol. It represents someone’s financial commitment to the protocol, their “skin in the game”.

A member of the Ethereum community, providing Ether to a validator node, in exchange for rewards.

The temporary commitment of a portion of your crypto into a smart contract for a specified amount of time in exchange for earning interest ("rewards").

On Ethereum: Smart contracts through which stakers provide Ether to another staker’s validator node.

Digital platforms providing staking services, usually through staking pools.

A common data entry linked to an ENS domain, such as a wallet address, avatar, or email.

A trade from one token to another.

Units that can stand for assets or deeds that are built on an existing blockchain.

An agreement between a wallet and smart contract, allowing limited or unlimited access to a specific token.

The way in which tokens are allocated across different stakeholder groups.

The two associated cryptocurrencies that make up a liquidity pool.

(Transactions Per Second) A measure of a blockchain’s scalability: the number of transactions it processes per second.

Exchanging assets or money for something valuable; money verb on the skill cube.

The path taken from starting token to ending token in a trade.

Planning the path taken from starting token to ending token in a trade.

A record of transfer, monetary or otherwise, on the blockchain.

The unique identifier for each transaction; it is derived from the transaction data, the digital signature of the transaction sender, and a one-time use number to avoid duplicate transactions.

How many transactions a blockchain can process at once, usually measured in transactions per second (TPS).

The quality of operating without need to trust in people or institutions. (Automatic, not owned by any one person).

(Total Value Locked) The overall amount of asset value stored in a specific place.

A bridge contract that verifies withdrawals itself, removing the need to trust any external authority.

A participant in a Proof-of-Stake network who locks up stake to check transactions and propose blocks, earning rewards for honest work.

The software a validator node runs to propose and check new blocks on a Proof-of-Stake network.

A computer device run by a member of the Ethereum community. It processes transactions on the network in exchange for rewards.

A mathematical proof that a batch of transactions is correct, letting a blockchain verify it without redoing the work.

A business practice focused on generating innovative, high-quality products and services for users and the economy.

A business practice where users are exploited through high fees, data harvesting, and unfair terms.

A smart contract that holds deposited tokens and puts them to work, giving depositors a token representing their share.

A vote in rejection of a governance proposal.

A wallet is an application or device used to send and receive crypto assets on the blockchain.

An app on your computer or phone, used to connect to your wallet on the blockchain.

The creator of the software you use to access your wallet. These providers do not own your wallet, but instead act as a bridge that lets you access your account on the blockchain.

The internet of centralized platforms and accounts, without blockchain infrastructure.

Refers to the internet of blockchains, where users can self-custody their assets & data.

A DeFi protocol where users deposit tokens to earn rewards. Yield farming means chasing the best of these rewards.

Mathematical method that allows one party to prove a statement is valid without revealing any additional information about it.

A Layer 2 rollup that uses zero-knowledge proofs to mathematically prove its batched transactions are valid on the Layer 1 blockchain.